Monitoring the implementation of the IMF programme and EU assistance (October 2024)

Successful cooperation with international partners remains critical for Ukraine. It is crucial for the financing of priority state budget expenditures (domestic revenues are used for security and defence). That is why the RRR4U Consortium continues to regularly monitor Ukraine’s compliance with the terms of the IMF financing programme and implementation of the Ukraine Plan, the fulfillment of which is the basis for providing assistance from the EU within the Ukraine Facility.

It is not the donors who need to fulfil reforms under financial support programmes – Ukraine needs them to achieve economic sustainability and to move towards econimic growth and improve the welfare of Ukrainians. It is also a way to gain the trust of all international partners and foreign businesses.

The US and the EU made important decisions to support Ukraine within G7 USD 50 bn package, which will be secured by russian assets, through the Extraordinary Revenue Acceleration Facility

The current monitoring takes into account the results of the implementation of the beacons and indicators as of the end of October 2024.

IMF

On 18 October, the IMF Board completed the fifth review of the financing programme. Ukraine has met all quantitative criteria and one structural benchmark that we had to meet by the end of June (the evaluation period) – the adoption of the law on Bureau of Economic Security reform. On 23 October, the next tranche of funding in the amount of $1.1 bn was transferred to the state budget.

An important change in the fifth review was the increase in the number of IMF funding tranches in 2025. The Fund did this at the request of the Ukrainian government. Funding from the IMF in 2025 will increase by $1.25 bn, while in 2026-2027 Ukraine will receive less money.

Ukraine was supposed to conduct an external audit of the National Anti-Corruption Bureau by the end of September, but failed to do so. The Fund agreed to postpone the deadline for this benchmark to the end of February 2025. Instead, the condition for a successful fifth review was a new prior action — the appointment of auditors — which the government did.

The next sixth review of the IMF programme will take place in December. At that time, our progress will be assessed against quantitative indicators and structural benchmarks with a deadline of the end of September 2024. Ukraine has fulfilled two of the three benchmarks, and the NABU audit has been postponed to February 2025.

The end of October is the deadline for five structural benchmarks:

Adopt amendments to the Customs Code
Improving medium-term budget planning
NBU’s assessment of risks to financial stability
Improving the management of state-owned enterprises
Audit of the financial condition of heat supply companies

The IMF will evaluate the implementation of the October benchmarks during the seventh review of the program, which is scheduled for March 2025.

Ukraine has already received 55% of the funding under the programme ($8.65 bn out of the planned $15.5 bn).

EU

The implementation of the Ukraine Plan under the Ukraine Facility programme continues.

For the first time, there was a risk of not receiving a timely tranche from the EU under the Ukraine Facility: one indicator was met only in October. The absence of a mechanism for disbursing partial tranches delays the entire disbursement.

What can we expect from the fourth quarter of 2024?

Планового виконання 13 індикаторів ІV кварталу;
Scheduled implementation of 13 indicators for the fourth quarter;
Receipt of a tranche of almost EUR 4 bn for meeting the third quarter indicators (tentatively in November, subject to a positive opinion from the EC and a decision of the EU Council);
Launch of the European Commission’s Scoreboard on the implementation of the Ukraine Plan;
Opening access to new macro-financial assistance from the MFA under the EU-approved Ukraine Loan Cooperation Mechanism in the amount of up to EUR 35 bn in loans.

Special topic of the issue — Prerequisites and opportunities for attracting green finance to rebuild Ukraine’s economy

You can view the previous monitors on the website RRR4U

RRR4U (Resilience, Reconstruction and Relief for Ukraine) consortium is a partnership of four Ukrainian civil society organizations with financial support from the Open Society Foundations and the International Renaissance Foundation. The consortium members are the Center for Economic Strategy, the Institute for Economic Research and Political Consultations, the Institute for Analytics and Advocacy, and the DiXi Group.